For job security? Well, finding a job can be so hard these days while being employed means having a secured source of income. If you are a regular employee, that means you can stay in your job for as long as you like, unless you quit, retire or you are terminated for a valid cause.

How about passion for the job? This might sound dramatic to some people, but this is true to some who really love what they are doing. They are those who consider their jobs as not merely work but as an art or passion – something they dreamed about when they were young and would love to be doing until they grow old. They enjoy it so much that quitting, retiring or switching jobs would be too hard to do.

What does the law say about early retirement?

Under Article 287 of our Labor Code, as amended by RA 7641, “any employee may be retired upon reaching the retirement age established in the collective bargaining agreement or other applicable employment contract”. If there is no retirement scheme or arrangement in the establishment, the compulsory retirement age is set at 65 years while the optional retirement age is 60 provided that the employee has rendered at least 5 years of service. For underground mining employees, because of the nature of their work, the compulsory retirement age is set at 60, while optional retirement is at 50 provided also that 5 years of service has been rendered.

From a reading of this law, it is clear that the compulsory and optional retirement age stated in Article 287 will apply only when there is no stipulation of retirement age in a CBA or employment contract. If there is a CBA or an employment contract providing for a different retirement age in a establishment, that agreement will prevail. This is because parties have the freedom to contract and to stipulate terms and conditions that are mutually acceptable, as long as these will not violate any law or be contrary to public morals. In a number of cases, the Supreme Court has declared that an employer may validly retire an employee under the terms and conditions of a CBA even if such agreement provides for a lower retirement age (Pantranco North Express vs. NLRC, GR No. 95940, July 24, 1996; PAL vs. Airline Pilots Association of the Philippines, GR No. 143686, January 15, 2002; Cainta Catholic School vs. Cainta Catholic School Employees Union, GR No. 151021, May 4, 2006).

Retirement plans are essentially mutual and voluntary agreements. Case law has described retirement as “the result of a bilateral act of the parties, a voluntary agreement between the employer and the employee whereby the latter after reaching a certain age agrees and/or consents to sever his employment with the latter”(Cainta Catholic School vs. Cainta Catholic School Employees Union, GR No. 151021, May 4, 2006). When employees, through their bargaining agent (union), enters into a CBA with their employer, they agree to abide by the terms and conditions contained in such CBA. While parties have freedom to contract, they also have the corollary obligation to comply in good faith with the terms and conditions of such contract.

Why not a uniform retirement age for all?

Different types of jobs and professions require different skills, knowledge and physical fitness and ability. A uniform retirement age for all would be unfair, impracticable and absurd. It would also interfere with the people’s freedom to enter into contracts relating to their employment.

While Article 287 provides for a compulsory and optional retirement age, this was not intended to apply to everyone. It only serves to protect employees in establishments where there are no retirement schemes so that they may enjoy the fruits of their labor. According to the Supreme Court, “it was intended for those who have no more plans of employment after retirement and thus need financial assistance and reward for the years that they have rendered service” (Philippine Airlines vs. Airline Pilots Association of the Philippines, GR No. 143686, January 15, 2002). Of course, if an employee retires at 60 or 65, there is less chance of getting hired for other jobs. But for one who retires at an early age, there are still a lot of opportunities and at such age, one would still be physically able and fit for any job.

Comments:

There are (16) Comments for the Early Retirement: Why not?

Lean says...

Good day!

If the retirement plan of a multi-national company in the philippines was only laid out in 2012, 5 years after the said company started office here, is it lawful that the coverage of the “years of service” of an employee who has been with the company since 2007 is only from 2012 until retirement age totally disregarding the 1st five years he had rendered service? Where there is no union nor CBA in place, can an employer have such a retirement program that is approved by DOLE?

What would be the computation for retirement benefit of one who retires at age 57 for health reason , had rendered 30 years of accumulated service to the same employer ( service is broken into 14 years then 16). No CBA.Thank you.

Posted on: 14/Feb/2013@4:21 pm

Juan says...

I have work for 6 years in my previous company and now 7 years in the present, but they are sister company and i havebeen transfered to my present company without resigning on the first. does the lenght of service be totaled to 13years? and can i receive an early retirement pay if i retired after this year? what should i do please help….

Posted on: 1/Apr/2013@4:36 pm

Joy says...

Will magna carta for women be enough to over power any cba agreement regarding age retirement?

Posted on: 22/Jun/2013@6:55 am

Jho says...

I’ve been working in a company for more than 3 years. I’m an online teacher. By 2013, the company started to terminate other teachers, particularly part timers. The management just said that they would retain regular employees. The situation is not good. Gradually, the number of students is decreasing. The management hasn’t said any other feedback. By July, we are only 3 teachers for night shift. Is it possible if we can just ask for separation pay for us to find better career path

Posted on: 25/Jun/2013@3:22 pm

Admin says...

JOY: I did not quite get the picture here. Does it have something to do with discrimination? Anyway, a CBA is a contract, and any contract or any provision in a contract, that is contrary to a law is null and void. The Magna Carta for Women (RA 9710) should prevail over CBA.

Posted on: 12/Oct/2013@12:17 am

Admin says...

TO JHO: Only regular employees are entitled to separation pay and only when the termination of employment is due to the following reasons:
(1) installation of labor saving devices
(2) redundancy
(3) retrenchment
(4) closing or cessation of business operations
(5) disease of an employee and his continued employment is prejudicial to himself or his co-employees
(6) when an employee is illegally dismissed but reinstatement is no longer feasible.

If your company’s main goal is providing online instruction, then your services as an online teacher is considered necessary in its operation, and you may be considered a regular employee. However, another important factor to consider is your employment contract, because in most cases of online instructors and call center agents, they are only considered as contract or project workers. They are not considered regular because their services depend upon the availability of a project to be undertaken. In that case, you will not be entitled to separation pay.

However, even if you are not regular and even if the cause of separation is not among those listed, you can still claim separation pay if that has been a company practice or policy.

Posted on: 12/Oct/2013@1:38 am

jansmartinc says...

i would like to know if I will be able to received any benefits if i will relinquish from my job? I am 44 years old I’ve been working here for the past 20 years .due to low salary and other personal reason that i want to quit my job

Posted on: 26/Oct/2013@4:02 pm

Jason says...

Hi ..
My mom is working in a computer sales company for about 15 years She’s been suspended this month for about 15- days just because for a back biting issue (dont know th exact story) but i guess its normal.. Now when she’s back their Hr is assigning her to a sales position which my mom is not knowledgable with.. (My mom is working with the same position for the last 15 years). And my mom said they had a conversation with thier Hr saying that . If my mom dont want the position why dont she resign. Is there anything we can do with this that is covered to any labor law?

Hoping for your positive response.

Posted on: 28/Oct/2013@3:21 am

elizabeth says...

hi,
I will be 60 years old on October this year and has been employed with my current employer for the last 17 years.
I plan to apply for my retirement benefits from my employer on my 60th birthday.
Can my employer deny or disapprove my application for retirement benefits? If yes, on what grounds or reasons?

Thanks for any advice.

Posted on: 11/May/2014@12:51 am

Roel says...

HI!
I’m 31 years old and I’ve been working in a private company for almost 7 years…i’m planning to resign this year…can i claim for a retirement benefit?
hoping for your reply..
thanks and more power…

Posted on: 30/Mar/2015@3:17 pm

Vicor says...

can the employer deny retirement at age 60.

employer is saying that he still need the employee and would like to have him stay in the company for a while, until a proper replacement.

will be reaching 60 on june 2015, but employer doesn’t want him to retire yet, what is the proper action of the employee to legally retire him, employee want already to avail of sss benefit.

Posted on: 1/Jun/2015@11:51 am

Ems Cabuay says...

Hi, I am 62 years old, working with a BPO for more than 5 years. The company has a retirement plan vesting at 5 years from date of regularization. Last year September 2014, our HR instructed us to have a succession bench since I am in the Sr. Mgmt team and member of the Management Committee. During my discussion with the HR, I mentioned that I plan to retire in 2016 upon reaching my 6 year anniversary. Three weeks ago, my GM to whom I report told that she is retiring me in December 2015. I objected but she said that it is not working. My performance is not to the standards. I believe it is not so because I have successfully transitioned functions from our onshore counterparts and received commendations. I had the highest employee engagement score across the organization. Today, she sent me draft announcement stating that I signified interest to retire in December 2013 and that she is announcing it early to find a suitable replacement. I was upset before the first paragraph are all lies to cover up at she is actually managing me out. Is her decision to force me to retire lawful? What are my chances if I file a case against my GM? thanks

I am 7 years working in an airline company without CBA. I only 37 and planning to leave the company.
What is the best approch on leaving the company. Submit a letter of resignation or letter of early retirement to avail the half salary for every year of sevice.
I am planning to work overseas.
Thank you

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